In addition, the company also agreed to pay the Internal Revenue Service $3 million over four years under a global settlement with the Departments of Justice and the IRS.
The problems were all said to have occurred under former CEO and founder John Hewitt. Under the agreement, the Franchise Group agreed not to rehire or otherwise engage Hewitt, grant him options or other rights to acquire equity in the Company, or to nominate him to its board of directors.
“By enhancing our policies, procedures and systems, we can better ensure the integrity of tax returns prepared in the Liberty system, which ultimately benefits our customers,” said Richard Ernst, Liberty’s VP of tax compliance, said in a prepared statement.
The company agreed to the following as part of the tax compliance program: *Elevate the head of tax compliance to the Executive Leadership Team of Liberty; *Offer training programs developed by attorneys, CPAs, Enrolled Agents or *experienced tax professionals; *Develop preparer certification programs; *Require new franchisees to be attorneys, CPAs, Enrolled Agents or have an experienced tax professional in their offices; *Increase oversight and review of tax returns prepared in the Liberty Tax Service system; *Automate measures to detect certain types of potential errors before returns are filed.